Which of the following is NOT a likely consequence of hyperinflation?
A. Money loses its value quickly
B. People rush to spend money before prices rise again
C. Stable long-term savings grow in value
D. Businesses struggle to set prices
Answer (1)
The correct answer is letter C. Stable long-term savings grow in valueDuring hyperinflation, money loses its value extremely fast—sometimes doubling in price in days or even hours. This makes savings in regular bank accounts or in cash practically worthless because what you could buy yesterday may cost twice as much tomorrow. As a result, long-term savings do not grow in value; instead, they shrink in purchasing power.A historical example is Zimbabwe in the late 2000s or Germany in the 1920s, where people had to carry bags of money just to buy basic goods. Although the Philippines hasn’t experienced hyperinflation, we have had episodes of high inflation (like during oil crises) that made basic necessities more expensive. Hyperinflation creates fear, chaos, and discourages saving, which weakens the economy even more.
